Asia Pulp & Paper Group (APP) rejected criticism on Thursday (17/05) from Greenpeace, which pulled out of a landmark conservation pact this week after linking the conglomerate's subsidiaries to deforestation. (Photo courtesy of Greenpeace/Ulet Ifansasti)

Kuala Lumpur. One of Indonesia's biggest businesses rejected criticism on Thursday (17/05) from Greenpeace, which pulled out of a landmark conservation pact this week after linking the conglomerate's subsidiaries to deforestation.

Activists had applauded a 2013 pledge by Asia Pulp & Paper Group (APP), one of the world's largest paper and pulp makers, to stop cutting natural forests and only use trees from plantations, a commitment Greenpeace backed and helped develop.

But Greenpeace said satellite images showed two pulpwood firms linked to APP's parent company, Jakarta-based Sinar Mas Group and its employees, had cleared about 8,000 hectares of forests and peatlands in Kalimantan since 2013.

"APP asked us to go to their mills and check there is no wood from deforestation," Kiki Taufik, a senior forest campaigner at Greenpeace Indonesia in Jakarta, told the Thomson Reuters Foundation on Wednesday.

"But if staff from Sinar Mas Group are involved in companies that destroy forests, this breaks the APP commitment," he said, referring to tree clearance by two companies it linked to Sinar Mas Group – Muara Sungai Landak and Hutan Rindang Banua.

APP said it was "disappointed" that Greenpeace had expanded their 2013 agreement beyond the firm's own activities to include its parent Sinar Mas Group, forest concessions not owned by APP, and companies that do not supply wood to APP.

"Issues cited by Greenpeace in their statement focus on the actions of businesses not under the direct jurisdiction of APP," the company said in a statement.

"The era of cooperation between Greenpeace and APP has achieved much, but the fight is far from over."

Joice Budisusanto, a director at Sinar Mas Group, one of Indonesia's largest conglomerates, said each business unit under its brand had "its own legal entity that is independently managed, but [they] share common history and core values."

Sinar Mas Group is committed to the highest technical, environmental and social standards, she said in emailed comments on Thursday.

Greenpeace said one pulpwood firm, Muara Sungai Landak, is owned by two employees of another Sinar Mas Group subsidiary, Sinar Mas Forestry, and a Sinar Mas Group mining subsidiary, Golden Energy and Resources Limited, owns the other.

Golden Energy and Resources said it could not provide an immediate comment, while Muara Sungai Landak could not be reached due to the lack of a publicly listed phone number.

Indonesia has been a focus of global efforts to rein in greenhouse gas emissions caused by the deforestation of swampy, carbon-rich peatlands to make way for plantations for industries such as palm oil, pulp and paper.

Forest cover has dropped by nearly a quarter since 1990, according to World Bank data.

Sinar Mas Group must fully disclose all of its employees' interests in companies with concessions – even if they are not suppliers – restore what was destroyed, and ensure it does not buy from firms involved in deforestation, Greenpeace said.